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With Lick's taking a licking, some wonder how much longer the Homeburger chain will last

The GTA chain, facing stronger competition in the gourmet burger trade, has dropped from a reputed 30 to just 12 outlets.

Lick's flagship store in the Beach, being taken over by a condo development, promised to reopen in a new location when it closed last October. But it hasn't, amid a string of closings at other outlets. (RICHARD LAUTENS / TORONTO STAR) | Order this photo

When the flagship Lick’s burger joint in the Beach closed down last October after 32 years, some took it as an ill omen. It appeared Lick’s was getting burned by hot new purveyors of Toronto’s gourmet burger scene, including The Burger’s Priest and The Works, which set up shop on that convivial stretch of Queen St. E.

But Denise Meehan, Lick’s founder and president, put on a bright face. “It’s not goodbye,” she declared on Facebook. “It’s see you soon!”

Months later, there’s still a banner in the window, though the lettering has faded with time, much like the ardour of its promise: “We will see you in the Spring!”

Now it’s autumn, and eight more Lick’s outlets have shuttered, most recently at Pape and Danforth in mid-August. According to the property landlord, that location was locked out because head office couldn’t pay the rent.

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In an interview early last year with local business program Professionally Speaking TV, Meehan spoke of “more than 30 stores.” Now the Lick’s website lists 12.

On top of this, provincial liens show four of Meehan’s companies— Lick’s Homeburgers and Ice Cream Shops Inc., two numbered companies and Beaches H.O. Administration Corp. — collectively owe the government more than $225,000. Meehan herself owes the government more than $500,000, according to the provincial liens database.

It’s enough for some to herald the fall of Lick’s, once vaunted as a homegrown entrepreneurial champion for pioneering high-quality fast food with a zany in-store experience.

“They’re displaying all the signs of a struggling chain that’s about to go under,” said Robert Carter, a restaurant industry analyst with the NPD Group.

A Lick’s employee said Meehan wasn’t available to speak with the Star for this story, but responded to a list of questions with an emailed statement from Meehan, saying closures are part of a “restructuring process” to increase efficiency.

“Over the years overheads have crept upward for all businesses,” Meehan wrote, adding that her restaurants have “slimmer” profit margins due to high quality products.

“Lick’s has responded by restructuring its store footprint, reducing overall costs for greater efficiencies in areas such as labour, rent, electrical, maintenance and taxes.”

The first Lick’s opened as an ice cream parlour in downtown Oakville in the spring of 1978, when Meehan was 27, according to her biography on the Lick’s website.

She soon installed a grill, and the Lick’s “Homeburger” was born: a handmade patty on a fresh Italian bun, topped with grated old cheddar, banana peppers and “Guk,” the special sauce Meehan invented in the store’s early days.

By 1988, when the Star profiled Meehan as a business visionary, Lick’s had added four Toronto locations and was gobbling up more than $1 million in annual sales. The restaurant’s famed singing-employees tradition was also established, lending fun-filled warmth to the place.

Kaley Jevnikar is well-versed in Lick’s lore. In 2000, then 19, Jevnikar got a job as a cashier at the now-closed branch near Highway 401 and McCowan Rd., working alongside her future husband.

“I thought it was really neat and unique,” she said, describing how she and her co-workers would sing songs about signature dishes — vegetarian “Natureburgers” and “taters n’cream” — using melodies from Nirvana and Beatles songs.

“We have very fond memories of it.”

It appears trouble with franchisees started within the past few years. The Lick’s footprint, which had stretched from Sudbury to Niagara Falls and east to Ottawa, started shrinking towards the GTA.

This summer alone, at least four locations were locked out because Lick’s head office fell behind on the rent, in some cases by tens of thousands of dollars, according to franchisees and signs posted by landlords on storefronts. Now several former store owners — some of whom claim to have lost their livelihoods trying to keep Lick’s locations afloat — have taken issue with the business model they initially believed in.

“Very poor sales, no marketing support from head office, all kinds of problems,” said Saurabh Shah, a former graphic designer who ran a Lick’s in Hamilton for two years. Shah closed his store in December 2012, when he declared bankruptcy after losing his entire personal savings of $300,000.

“I just walked out because I couldn’t handle the pressure,” he said.

Two groups of former franchisees from Mississauga and Oakville have filed a rescission claim against Lick’s, arguing the potential profits were exaggerated by head office.

Kevin Doyle, a bus driver who ran a Lick’s with his wife in Burlington, accused head office of painting a rosier picture of the money he’d make as a franchisee. They walked out on their contract in June, claiming to have lost $250,000 “and three years of our lives.”

In her statement, Meehan said Lick’s works hard to help franchisees, and that location operators are partly to blame when they struggle. “Some franchisees resist doing what they should do to grow their business and sometimes there are disputes,” she wrote.

Marufa Ahmed, one of the locked-out franchisees, has since reopened her restaurant at 1585 The Queensway. She said she’s now paying franchise royalties directly to the landlord, instead of Lick’s, to pay down the $88,000 rent allegedly left unpaid by head office.

Another branch that was locked out in June, on Argentia Rd. in Mississauga, remains closed as the former operators contemplate how to recover the money they sank into opening the business.

“We don’t know what’s happening with head office, because each of the locations is closing one by one,” said Shamsa Rajani, who left her job at a bank to run the location with her husband for three months.

It seems head office on Queen St. E. hasn’t been spared, either. A former employee who spoke on condition of anonymity said morale there has been chipped away as unfilled positions were eliminated and branches were boarded up. There are now five people working in the office, down from “more than 13” at the start of the year, the worker said. The worker added that four people were laid off on Sept. 13 because “of the financial situation” of the company.

The Star was unable to confirm if layoffs took place.

On Thursday, the Lick’s website was gone, while the head office was locked, although employees still appeared to be using the building.

For Carter, the restaurant analyst, it amounts to blood in the water for Lick’s.

“Clearly, they’re not maintaining guest counts and getting customers through the door,” he said, citing his firm’s survey data that shows that, among 5,000 regular gourmet burger customers surveyed in Ontario, only 5 per cent visit Lick’s more than once in a three-month period. Carter called that “brutally” low; by contrast, 57 per cent of burger customers visit McDonald’s multiple times.

Carter added that the gourmet burger market, particularly in Toronto, has burgeoned to $300 million in sales this year in Ontario, with newer grillers whose smaller stores and flashier menus have managed to out-compete and out-innovate the former staple of the now sizzling burger scene.

“Lick’s is just not keeping pace,” he said.

In the opinion of Toronto-based burger blogger Michael Nusair, the GTA’s gourmet burger torch — nay, spatula — has thus been passed to a new generation of grillers.

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